Saturday, 26 May 2012

In
today’s world of innovation through Information Technology, SAP is truly a
dynamic package by which one can integrate, diversify, and streamline their work-processes
with multi-dimensional compatibility.

SAP
– “Systems, Applications, and Products in Data Processing” – was founded in
1972 with its headquarters in Walldorf, Germany. For
those who are in the Finance/Accounting Profession who wish to delve into a
creative and interactive scenario by which they can apply their hands-on
experience & expertise to another level of fantastic intellectual
stimulation, SAP FI/CO Implementation & Configuration is truly the
ultimate. Their expertise will render them to very swiftly master its technical
configuration – for the concepts are all part of every Finance/Accounting
Professional’s innate thought-process – and - the SAP modules follow a thorough
schematic pattern by which all functionalities & technicalities are
logically laid-out.

SAP
Financial Accounting (FI) is an important core module where in live-time, the
financial processing transactions are all captured to provide the basis via
which data is drawn for external reporting. This SAP FI Module is integrated
with many parallel modules that enable a company to unify processes that may
have needed the utilization of many software packages.

Other
Modules of SAP that commonly find a role of integration with FI are (but not
limited to) Material Management (MM), Sales & Distribution (SD), Human
Resources (HR), Product Planning (PP), Controlling (CO), etc. Amongst these CO
– Controlling is another major focus for those coming from the
Finance/Accounting/Auditing/Budgeting and Financial Reporting/Analysis Backgrounds/Professions.

Now,
the new SAP GL – integrates many streamlined processes to be unified more
closely to further alleviate any duplication of live-time tasks. This New
General Ledger Accounting in mySAP ERP has some dynamic advantages in
comparison to the classic General Ledger Accounting (as used in SAP R/3
Enterprise Version) – such as the ability to run real-time reconciliation
between Management Accounting (CO) and Financial Accounting (FI) – i.e. – there
is a real-time integration with Controlling. Previously time-consuming
reconciliations are hence now rendered obsolete. The new SAP GL further allows
the management of multiple ledgers within the General Ledger Accounting Module
itself. This creates the scope for portraying parallel accounting scenarios
within the SAP System.

Controlling
(CO) is the term by which SAP refers to “Managerial Accounting”. The
Organizational Elements in CO are Operating Concern, Controlling Area, and Cost
Centers. Hence, the SAP CO Module helps management by providing reports on cost
centers, profit centers, contribution margins, profitability, etc. It focuses
on internal users, in contrast to FI – which focuses on data drawn for external
reporting. The transactions posted in FI are transferred to CO for cost
accounting processing, analytical reporting, and audit-controlling spectrums.

There
can be either a one-to-one relationship or there can be one-to-many
relationship between Controlling Areas Verses Company Codes. Hence, CO becomes
the governing module that oversees the consolidation of costing data whereby
management can derive their perspectives for analysis.

Some
methodologies that are unique in their structural concepts are – for example –
CO PA & PCA. PA refers to Profitability Analysis that derives from how
profitable your market-segments are on their external sides. EC-PCA refers to Profit
Center Accounting that produces the analysis that portrays how your internal
‘profit centers’ are functioning in terms of their profitability. To further
expand the potential, we also have CO-PC in SAP – which streamlines Product
Cost Controlling.

Costing-Based
Profitability Analysis groups costs and revenue according to value fields and
costing-based evaluation approaches. Both of these may be defined by the
client. It provides the client with a complete short-term profitability
reporting capability at all times.

Account-Based
Profitability Analysis is organized in accounts using an account-based
valuation process. Its use of cost and revenue elements gives it a distinguishing
characteristic. This provides the client with a profitability report that is
permanently reconciled with financial accounting.

The
SAP Control (CO) Module is integrated with FI, AA, SD, PP, and HR. While FI is
the main source for data for CO, the others such as SD, MDD, and PP have many
integration points with CO. Revenue postings in FI will result in postings in
CO-PA & EC-PCA. The HR Module also generates various types of costs to CO.
In addition, Planned HR Costs can be passed on to CO as well for CO planning
purposes.

Above
is a brief outline and write-up about the dynamics of SAP FI/CO. It would be
well worthwhile for Finance/Accounting Professionals to explore the depths of
this innovative software for the enrichment of their career spectrum.